Entry for Interest receivable & Payable with TDS

This query is : Resolved

Quick Summary

Interest payable of 1000 with 10% TDS requires entries in both parties' books. Mr A records interest expense, liability to Mr B, and TDS payable; Mr B records interest income, receivable, and TDS recoverable. Interest paid is indirect expense and interest received is indirect income.

udaya chandran

udaya chandran (Querist)
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29 March 2011 Please help me!

Mr.A has to give interest of Rs.1000/- and (TDS to be deducted @10%) to Mr.B

What is the journal and payment/receipt entry in the books of both Mr.A and Mr.B

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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29 March 2011 In the books of A :
1. Interest due entry >
Interest A/c Dr. 1000
To B's A/c Cr. 900
To TDS payable Cr. 100

2. Interest pay Entry
B's A/c Dr. 900/-
To Bank Cr. 900/-

3. TDS payment Entry
TDS Payable Dr 100/-
To Bank Cr. 100

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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29 March 2011 In the books of B :
1. Interest receivable >
A's A/c Dr. 1000/-
To Interest A/c Cr. 1000

2. Interest Recd Entry
Bank A/c Dr. 900/-
TDS Recoverable A/c Dr. 100
To A's A/c Cr. 1000/-

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Ram Avtar Singh

Ram Avtar Singh (Expert)
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29 March 2011 MR A at the time of Interest Credit
1:
Interest Paid on loan Dr
Mr B Cr
2:
Mr B Dr
TDS Payable CR

Mr B
1:
Mr A Dr
Interest Accrued/ receivable Cr

2:
TDS receivable Dr
Mr A Cr.

udaya chandran

udaya chandran (Querist)
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29 March 2011 Thank You Sirs,

Please tell me if Interest A/c above mentioned comes under the head Indirect Income or Liability.